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Tuesday, January 14, 2014

by Kent Aitken

Voices have been asking how government could take advantage of interesting models such as gamification, crowdsourcing, nudges, etc., looking for opportunities to innovate. I've tended to think that, if there is value in such approaches, the better question would be "Why are we not already using them?"

And there's a reasonable answer: misalignment between the hypothetical incentives of an organization and those of individual decision makers within it (the principle-agent problem), which holds for experimentation with creative solutions to problems.

Such experimentation might work for a project. But it would definitely benefit the broader organization, in terms of pathfinding approaches that might be scalable for many projects. But, those benefits would be long-term, widely distributed, and hard-to-measure. In contrast, the risks would be immediate, local, and direct. Creative solutions and organizations are mismatched.

Nick shared on Twitter this article about creativity's uphill battle, which connects solidly on the topic.

"Even people who say they are looking for creativity react negatively to creative ideas, as demonstrated in a 2011 study from the University of Pennsylvania. Uncertainty is an inherent part of new ideas, and it’s also something that most people would do almost anything to avoid. People’s partiality toward certainty biases them against creative ideas and can interfere with their ability to even recognize creative ideas."

Games are their rules, and in most cases these rules discourage deviation from the established path.

"In terms of decision style, most people fall short of the creative ideal … unless they are held accountable for their decision-making strategies, they tend to find the easy way out—either by not engaging in very careful thinking or by modeling the choices on the preferences of those who will be evaluating them."

So how could we hold ourselves to account for our decision-making strategies? That is, how could we best change the rules of the game?

The Rules of the Game

I think that there is opportunity to change the rules where performance measurement, strategic planning, and project approvals meet. In the field of Environmental Economics there's a decision-making model called Adaptive Management, which in effect mandates innovation. This is a standard business planning cycle:

Adaptive Management, by contrast, adds three key features:

1. It mandates experimenting with multiple models to solve a problem

2. It adds a "hypothesis" gate to solution design, mandating a statement like "This is what we think will happen" (inevitably accompanied by why,which is crucial to enable the 3rd)

3. It makes "the acquisition of information with which to make future decisions" a part of the outcome on which managers are measured

So instead of deciding on the singular course of action and following through regardless, an Adaptive Management process would apply the scientific method to complex solution design and test multiple solutions. Then, dissect what worked, what didn't, and why.

There's even a governance model for it. Government real estate projects now go through a P3 Screen. That is, an assessment for suitability for a public-private partnership. Organizations could institute an analogous Experimentation Screen for program and policy development.

So what would this do?

This would dissolve risk aversion: delivering two models that don't work is part of the goal, so managers would have policy cover and incentive for bold experimentation with policy and program design.

This would create a body of well-documented experiments on which to base future solutions.

This would create situations in which novel solutions are proven to work, and there'd be little need to justify their pursuit over more conventional approaches.

This would lead to crowdsourcing, gamification, and crowdfunding. Or not. The important thing is that it'd lead to what works, and we'd know it. And how, and why.

I titled this post the oxymoronic "standardizing innovation." Innovation, in and of itself, is a neutral term - it's useful insofar as the innovation works. So a standardized process that consistently leads to results is as good as innovation in my books.